A solid showing by Malayan Cement translates into higher share price

What a solid ride Malayan Cement Bhd has been. It hit a new 52-week high on Feb 23, touching RM5.16.

The heightened interest in the cement manufacturer could stem from its better-than-expected 2QFY24 results. Its core net profit came in at RM117.7 million, up 33% QoQ, >100% YoY in 2QFY24.

This brought the 1HFY24 figure to RM206.3 million, a more than 100% jump YoY. Its improved financials are on the back of higher sales volume and better average selling prices for domestic cement and ready-mixed concrete.

Bulk cement prices have stabilised and continue to sustain at RM380/tonne as of January, which was a 2.2% drop YoY. The 3-year bulk cement price average for between 2019 and 2021 stood at RM216.80/tonne.

In addition, its margins are better as coal prices eased in 2QFY24, pushing its pretax profit by

21.4% QoQ (7 times surge YoY).

The growth in cement volumes were mainly driven by logistics facilities, infrastructure, data centre, and residential projects.

As it is, there is a number of infrastructure projects, which are expected to kick off in the near term and building material players – particularly cement producers – are seen as key beneficiaries of the country’s infrastructure wave.

In view of the anticipated higher demand, the Sarawak State Government beefed up its cement supply chain with Innocement, which is a JV between Sarawak Economic Development Corp and Bintulu Development Authority, entering into MoUs with YTL Cement and Thailand’s SCG International in July 2023.

Being the largest cement producer in the country, Malayan Cement will definitely benefit in the construction and property activities.

Investors would not go wrong cementing their position with this No. 1 players in the country.